Aircraft: SMALL AIRCRAFT; HIGH WING; 1 ENG; FIXED GEAR
Phase of flight: Takeoff / Launch
Anomaly: Deviation - Altitude Excursion From Assigned Altitude; Deviation / Discrepancy - Procedural Clearance; Deviation / Discrepancy - Procedural Published Material / Policy; Inflight Event / Encounter Weather / Turbulence

It was 6;000 overcast in ZZZ1 and 4;900 overcast in ACK when we left the house for the 5 minute drive to the airport and the 15 min VFR flight that we have done literally hundreds of times. 15 minutes; out the Jetties; follow the ferries; 353 degrees on the GPS if you could be bothered to set it (we always set it in both;) and you can see it climbing through 500 feet anyway. Misty with 4 NM visibility; yes; but easy peasy in an area where we often have dense fog. Lower stuff was forecast for later but fine now. And a quick skim of the NOTAMS revealed that the ILS 15 was inoperative; ILS 24 ACK LOM inoperative but otherwise; ILS 24 ACK OK.We started; ran the checklist; I dialed the altimeter up a hundred or so feet to field elevation. We taxied out to Runway 24; did the run up; and reported ready for takeoff. 'We' was me and my Private Pilot wife who has 800 hours of pretty advanced stuff considering the type of flying that we do. Lots of IFR; Class B airports; flying throughout both of the Americas; etc. And I'm an airline Captain. I gave the usual 'right turnout for ZZZ1' at the end of it. The Tower controller said 'you know it's 300 feet overcast over there?' As I pondered that thought; she offered to stick an IFR flight plan in for us. ACK to coast is an artery for the island. All day; every day; dozens and dozens of planes criss cross. Thinking that it was VFR basically; I confirmed that we should commence the takeoff roll. She said yes; I didn't want to make my wife late for her first client; so off we went. I figured I'd quickly catch up. The little CFI voice; however; was saying that I should taxi clear and think about what we were doing; be more precise with the avionics set up; but then the only 'real IFR' bit would be the last few seconds of the ILS at the other end. The clearance came at about 500 feet 'Via radar vectors; climb to 2;000; expect 3;000 in 10; squawk.' Then over to Cape Approach and 'climb 3;000. Right heading 330; expect RNAV 24.' 'We'll need an ILS please;' I said; thinking of the ILS 15 being out. He replied 'ILS 24 glideslope (GS) is out of service; how about a LLZ?' We had discussed having only 20 Gals of fuel. That's 2 hours worth but when I looked up the LLZ minima and saw that the MDA was 460 feet; but we only had a 300 feet overcast; 20 Gallons didn't sound like much. I then noticed that the two GPS's were showing us in different places. The island has a very distinctive shape so it was very obvious. Which if either was right? I weighed continuing into what was becoming a nice little series of links in the chain (or holes in the swiss cheese) versus returning to ACK for a landing (we were still climbing and were basically still on a wide downwind to the airport.) Just as my wife said 'I can take the airline to work;' I said 'yup; we're going back' and told Cape of this; expecting a right turn onto base and landing within a couple of minutes. He sounded concerned; read back the whole ATIS that we already had; and by the time he had given us a vector for the ACK ILS and a descent to 1;600 feet; it just seemed easier; and would do no harm; to go with the ILS. I pushed over from gentle climb into gentle descent and verified the set up for the return approach; which we always have set up anyway. The GPS's were still baffling me and now we had a legitimate GS flag on NAV 1. While I was fumbling with this stuff; Cape asked what our altitude was. I replied 'passing 1;800 feet.' He said 'I'm showing you at 800 feet.' So I climbed back up and not a lot was said.Error number one happened during the post ATIS setting of the altimeter and was not picked up during the instrument check done during the before takeoff checklist. The pressure from the plane's previous flight had dropped from 30.60 then to 29.60 on this day. I am meticulous during IFR operations but this day; with a VFR mindset; by dialing the needle up to field elevation; rather than leaning across my wife who sits left seat; to check setting; I opened the door to this whole thing. I was off by one whole inch. We were visual the entire time (with the ground and horizontal visibility > 3sm) and nothing was ever compromised in any way but I have never encountered this situation before. We have had deep lows and unusually high domes of pressure this winter. We never levelled off so we never noticed the error and with all the other distractions and brief duration of the flight; one can see how this could have become a big link in a chain. Notes to self would include:1) Check the weather at the VERY last minute. Maybe display the 'Flight Rules Category' colored dots on ForeFlight. Had the ZZZ1 dot gone from blue to pink; we might have spotted it.2) Never accept an IFR clearance during critical phases of flight. It sounds obvious but ACK-ZZZ1 is always the same and is burned into our brains. 3) Complacency complacency complacency.....4) A good point was that we both thought to pull the plug as soon as the issues started piling up; verbalized it; and did it.5) Always stop and pause during instrument and avionics set up. There is no VFR vs. IFR way of doing it. Question each setting every time and answer 'why' each thing is set that way. And refer to the note about complacency above.6) Having had a career of CRM; my wife did offer to take control during the radio confusion; but the insidious nature of this event was such that it didn't trigger my handover of control and formal problem solving methodology mode of thinking. When something goes bang or a light comes on; it's easy to launch into trained for responses. We had no 'BARO DISAGREE' EICAS message on our [airplane].7) We usually both check the altimeter setting informally but will now do so formally and I'll consider what other 'set and crosschecked' items we should extend that discipline to.The GPS's never made any sense. We could see where we were and it wasn't where either of them showed. Nor did we ever get the GS to work despite verifying with ACK Tower that it was radiating. As we were in MVFR; it didn't matter. A subsequent recreation of the flight on a CAVU day; of course; saw no problems whatsoever. But the noise from this sequence of issues blew my Situational Awareness out the window in conjunction with all the other non-normal things that transpired on that 'VFR' day full of CRM issues. And interesting to note that the biggest link in the chain happened before we had even begun to taxi. A pilot reported departing ACK with an incorrect altimeter setting and leveling at 800 feet over the bay when he thought he was at 1;800 feet. Poor weather planning and two GPS signals reporting different than actual location were mentioned as contributing factors.